Retirement Planning & Income Analysis

No matter how much someone has invested, we find that there tends to be a question of “am I going to be okay?”

A singular strategy of chasing returns with your whole portfolio can leave a person’s perspective on their retirement as volatile as the markets; market is up ‘I am going to be ok’, market is down ‘oh no what am I going to do’. That is not what we want for our clients.

Building a Plan That Addresses Your Financial Goals & Retirement Risks

Building a retirement plan that prepares you into retirement requires addressing both your financial goals and addresses your retirement risks.

DETERMINING YOUR FINANCIAL GOALS

  • Income Needs
  • Contingency Expenses
  • Legacy Goals

ASSESSING YOUR FINANCIAL RISKS

  • Longevity
  • Inflation
  • Health Care
  • Long-Term Care
  • Sequence of Return Risk
  • Stock Market Risk
  • Public Policy Risk

STRONGER RETIREMENT PLAN

While you can’t control the risks, there are pieces you can put in place to prepare yourself well for all the variables in retirement.

MGUIDANCE Retirement Planning for Your Needs & Risks

WE HELP YOU FIGURE OUT IN DETAIL HOW MUCH INCOME YOU ARE GOING TO NEED ON A MONTHLY BASIS DURING RETIREMENT.

We look at how much income you are going to have from sources such as pensions, social security, bond ladders, or annuities. If you haven’t built an optimal income base or floor, we are going to look at strategies that may help you get there. Think retirement pay-check.

From there we look at tax optimized strategies that could give you additional available assets at the different time frames you may need or want it. With your core pieces in place it is also more clear how you are strategizing your legacy coupled with your comprehensive retirement.

M Guidance Retirement Process

Building a retirement plan that prepares you into retirement requires addressing both your financial goals and addresses your retirement risks.

BUCKET #1

  • YEARS 1-5
  • LOW RISK RETURN

BUCKET #2

  • YEARS 5-10
  • CONSERVATIVE STRATEGIES

BUCKET #3

  • YEARS 10-15
  • MID-TERM STRATEGIES

BUCKET #4

  • YEARS 15-20
  • MODERATE STRATEGIES

BUCKET #5

  • YEARS 20+
  • GROWTH & LEGACY STRATEGIES

INCOME FLOOR

SOCIAL SECURITY, PENSIONS, ANNUITY INCOME, LADDERED BONDS, ETC.

Retirement Planning Services

OUR RETIREMENT PLANNING SERVICES CAN INCLUDE BUT ARE NOT LIMITED TO THE FOLLOWING:
  • Retirement income planning
  • Social Security Optimization
  • Goal & tradeoff planning
  • Employee benefits planning
  • Stock option planning
  • 401(k), annuity, and pension strategies
  • Long-term care planning
  • Employee benefits
  • Employee retirement plans
  • Life, disability, and health insurance

Everyone Offers Retirement Planning These Days. What’s so Special About Our Approach?

We often compare retirement planning to trying to hit a moving target in the wind. The target is your retirement goals – essentially what you want to spend and pursue with your finances.

We often compare retirement planning to trying to hit a moving target in the wind. The target is your retirement goals – essentially what you want to spend and accomplish with your finances. The target is moving because you don’t know how long you will live – your retirement could last 5 years or 40. Then there is wind because things will change along the way.

Just like when NASA goes to the moon – and the countless calculations involved – we can’t expect to reach our end target by going in a straight line. Instead, we need to have a plan that addresses the risks along the way and can change as our retirement changes.

Any quality retirement income plan should start with a review of your goals or spending needs. Next, you should examine your current assets and retirement income sources like pensions, 401(k)s, and Social Security. We spend a lot of time helping you avoid potential mistakes when it comes to retirement planning.

All of us have had a flat tire on our bikes growing up. One of the great tricks for repairing the tire was to submerge the inner tube in water to see where the bubbles came from. Then you could find the leaks and patch accordingly.

Your retirement income plan may be sending up bubbles, too, whether around Social Security, taxes, healthcare or somewhere else – and these losses need to be patched up right away.

So, to help your retirement plan be more airtight, let’s look at a few of the common leaks.

Taxes

When it comes time to collect Social Security, remaining tax efficient is vital – up to 85% of your Social Security can be taxed. This is where having a trusted financial advisor is vital.

Each person’s financial journey is unique, meaning the right solution for you might not be the same as the next person. Your advisor can give you retirement income planning strategies for the best time to take benefits and how to stay within tax brackets that will minimize your penalty.

Paying too much in taxes on Social Security is one of those slow leaks that does a lot of damage over time.

Spousal Benefits

Missing out on spousal benefits is another trouble spot in retirement income planning.

Social Security was designed as a safety net for everyone, and conceived of in a time when most women didn’t work outside the home. Thus, spousal benefits were created to support the non-working spouse, even if the working spouse dies or there is a divorce.

Even if you haven’t paid into the system formally, you can receive a benefit that is half the amount of your spouse’s benefit. Because you supported someone who paid into the system, you should also receive benefits.

Spousal benefits also work for ex-spouses. If you were married to a Social Security contributor for 10 years or more, got divorced, and then did not remarry, you are eligible for spousal benefits. The same logic is at work here. At one point in your life, you supported someone who paid into the system and therefore you also receive benefits.

Inflation

Inflation is another concern in retirement finance. Your Social Security benefits have lost about 34% of their buying power since the year 2000, according to a 2018 study from the Senior Citizens League. You’re looking at 66 cents on the dollar compared to less than 20 years ago due to inflation.

The cost-of-living adjustment (COLA) on Social Security benefits is far behind inflation at any given point. Benefits payable in January 2020 increased 1.6%. That’s an average of about $33 a month – enough to take the grandkids to Denny’s (no dessert of course), but not enough to catch up with inflation.

Medicare and Social Security

Medicare and Social Security aren’t meant to be your full retirement plan, but they fill in gaps and free up other money you can use on living life.

Your Medicare premiums can double if you don’t take your Social Security in the right way, and there are chances you’re paying too much in taxes. An advisor can help you walk through the process and protect the money you need.

Risk Tolerance & Downside Protection

Finally, does your portfolio have enough downside protection? This is important for if the economy hits a bump like it did in 2008, when the market dropped 38%.

If you’d saved $2 million, you’d suddenly have $1,240,000, throwing off your whole plan.

The key is balance. Your investment strategies should reflect your risk tolerance profile and stage of life. That’s not to say a market downturn won’t hurt, but with the right downside protection you can be in much better shape.

You may already have enough saved for retirement and you want to be conservative with your investments to help make sure you keep that retirement nestegg. That’s where we begin in your retirement planning process – by looking at your comfortability with risk, where you’re at in correlation with your goals, and your long-term financial planning objectives.

By avoiding common mistakes and having your eye on the right target, our plan is to help you hit the mark – regardless of if it’s a moving target in the wind.